Reduced Treasury Supply
May Produce Challenges

NEW YORK -- Bond investors, who long hoped to see the national debt paid down, perhaps should be careful what they wish for. It might come true.

For years, heavy U.S. government borrowing swamped investors with Treasury securities, pushing all kinds of interest rates higher, including mortgage rates. But now that the government is actually paying down its debt -- something almost certain to benefit the economy overall -- it's having...